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Gun Trusts: The Advantages and Benefits of Having One

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Gun trusts are trusts which are specifically designed to hold legal ownership of firearms. A typical estate plan may provide for estate tax savings, probate avoidance, Medicaid planning, and/or other related strategies. However, firearms present additional issues that must be carefully addressed to avoid unintended consequences in the future.

Gun trusts can make it easier to handle firearms after the owner’s death and may prevent surviving family members from inadvertently violating the law if they come into possession of them.

Those firearms governed by the National Firearms Act are not permitted to be transported or possessed by any other individual unless the registered owner is present. This, of course, presents a problem if the registered owner is deceased.

However, when owned by a properly drafted gun trust and properly administered, these weapons may be legally possessed by the trustee, as well as used by a trust beneficiary under the authority of, or in the presence of, the trustee. This greatly simplifies and expedites the transfer, and may save users from inadvertent violations of the National Firearms Act. Such violations can result in steep fines, prison, and forfeiture of all rights to possess or own firearms in the future.

Types of Weapons Held in Trust

Commonly, gun trusts are used for weapons that are primarily regulated by two longstanding federal laws. First is the National Firearms Act of 1934 (NFA). Second is a revision of the NFA, known as Title II of the Gun Control Act of 1968.   These weapons are often called NFA or Title II firearms. NFA weapons include machine guns, silencers, short-barreled rifles, and short-barreled shotguns (including sawed-off shotguns), grenades, and others.

NFA weapons must have a serial number and be registered with the Federal Bureau of Alcohol, Tobacco, Firearms, and Explosives, commonly called the ATF or BATF. To transfer a registered firearm, the owner must get ATF approval and usually pay a $200 fee. State laws may further restrict the possession and/or sales of NFA firearms as well. Massachusetts has some of the most restrictive laws in the United States requiring approval from each city of town’s police chief where the weapon may be present, used, or transported.

What are Benefits of Gun Trusts?

First, it may allow more than one person to possess and use the weapons held in trust. If you name more than one person as trustee, each trustee may have the right to possess or use the trust firearms.

Second, keeping the gun in the trust even after the current owner’s death avoids the usual transfer requirements, thereby mitigating the time and expense of estate administration and probate. By creating a gun trust and transferring firearms to it during your lifetime, you can arrange for the trust to stay in existence after your death. The trustees and beneficiaries possess rights you grant them in the terms of the trust provided they also comply with relevant federal and state laws. Because the firearm stays in the trust before and after your death, the usual transfer procedures are usually avoided.

Third, gun trusts may make the personal representative’s job easier in the event he or she encounters firearms when administering the assets of the decedent’s estate. The Personal Representative may not be familiar with the rules about ownership and possession of various firearms. A personal representative could violate criminal laws by transferring a weapon without going through the proper procedure, taking or sending it to a state where it is prohibited, or giving it to a person who is legally prohibited from owning it.

When firearms are held in a trust, the trustee instead of the personal representative is responsible for possession of the firearms. An important consideration is naming an appropriate trustee who is well-versed in federal and state gun laws.

These are just some of the benefits of gun trusts. A knowledgeable estate planning attorney who is also well-versed in federal and state gun laws can help you determine whether a gun trust would be appropriate for you as well as help you and your trustees administer the trust.

About the Author

Christopher R. Mitchell is admitted to the Massachusetts bar and concentrates his practice in the areas of estate planning, trust and estate administration, tax planning, and business succession planning.

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